U.S. Markets closed
  • S&P 500

    3,911.74
    +116.01 (+3.06%)
     
  • Dow 30

    31,500.68
    +823.32 (+2.68%)
     
  • Nasdaq

    11,607.62
    +375.43 (+3.34%)
     
  • Russell 2000

    1,765.74
    +54.06 (+3.16%)
     
  • Crude Oil

    107.06
    +2.79 (+2.68%)
     
  • Gold

    1,828.10
    -1.70 (-0.09%)
     
  • Silver

    21.13
    +0.09 (+0.42%)
     
  • EUR/USD

    1.0559
    +0.0034 (+0.3273%)
     
  • 10-Yr Bond

    3.1250
    +0.0570 (+1.86%)
     
  • Vix

    27.23
    -1.82 (-6.27%)
     
  • GBP/USD

    1.2270
    +0.0009 (+0.0736%)
     
  • USD/JPY

    135.2100
    +0.2770 (+0.2053%)
     
  • BTC-USD

    21,231.75
    +324.30 (+1.55%)
     
  • CMC Crypto 200

    462.12
    +8.22 (+1.81%)
     
  • FTSE 100

    7,208.81
    +188.36 (+2.68%)
     
  • Nikkei 225

    26,491.97
    +320.72 (+1.23%)
     

USD/CAD Price Prediction – USD/CAD eases on weaker-than-expected US economic data

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Key Insights

  • Gold prices fell as the dollar held near lows. 

  • Treasury yields remained little changed.  

  • Oil prices surge amid the prospect of an EU ban on Russian oil.

USD/CAD pulls back as global risk-on sentiment weighed on the safe-haven dollar and rising oil prices underpinned the Loonie. Gold prices continued to decline on Thursday as Fed minutes indicated additional 50-basis point rate hikes in the June and July meetings.

The dollar remains at its one-month low amid slowing economic growth. Benchmark yields remained little changed today in the wake of key economic data. The ten-year yield edged slightly lower as investors continued to digest the latest news.

Oil prices maintain upward traction as the prospect of an EU ban on Russian oil becomes more likely as they come closer to an agreement. US crude oil inventories declined more than expected last week which sent prices soaring. 

First-quarter GDP pulled back by a rate of 1.5%, worse than the expected drop of 1.3%. The pullback marks the worst it has been since Quarter 2 of 2020, which was during the peak of the pandemic. The GDP reading indicates a stronger pullback in the economy than economists expected. 

Private inventory and residential investment were revised to the downside, which countered the uptick in consumer spending by 3.1%. Economists expect an improved reading in Q2, as geopolitical tensions and the omicron variant weighed on economic activity. 

Jobless claims fell by 8,000 to 210,000 from 218,000 during the previous week.

Technical Analysis

The USD/CAD dips below the 10-day moving average of 1.287 before retreating to the lower 1.28 level. The currency pair has been unable to break above the 1.29 mark despite a hawkish Fed. This situation presents a bearish outlook for USD/CAD. Rising crude oil prices might further underpin the Loonie. However, a break above 1.29 could buck the trend and present a bullish outlook for the currency pair.

Support is seen near the 50-day moving average of 1.27. Resistance is seen near the 10-day moving average of 1.283. Short-term momentum turned negative as the fast stochastic had a crossover buy signal. 

Medium-term momentum turns negative as the MACD line might generate a crossover sell signal. This scenario happens when the MACD line  crosses the MACD signal line. The trajectory of the MACD is in positive territory, which reflects an upward trend in price movement.

This article was originally posted on FX Empire

More From FXEMPIRE: